Most new doctors, whether they live in New York City, Orlando, Florida or Munich, Germany don’t think about estate planning when they first begin their practice. Young physicians are often concerned with establishing a growing list of patients and paying off school loans. Establishing an estate plan and reviewing it periodically is even more important if you have assets in more than one country.
Aspects of Early Estate Planning
Many people harbor a misconception that estate planning only deals with what happens to your assets after you die. However, it has three important aspects that can impact wealth during your lifetime. These three aspects involve:
- Incapacitation planning to determine who makes legal, financial and medical decisions if you cannot do so for yourself
- Distribution planning to determine what happens to assets when you pass
- Transfer tax planning to address national, state and international taxes that may be triggered when transferring wealth during your lifetime.
Incapacitation planning involves drawing up documents such as a living will, health care proxy, an advanced directive and power of attorney. Estate distribution planning involves issues such as determining who will take care of your children along with division of assets among your survivors.
Another legal instrument to consider is a living trust, which can provide direction for your assets when you are alive as well as after you pass. Many doctors use living trusts as their foundational legal document for estate planning purposes.
It’s Never Too Early to Begin Planning
Even if you only have minimal assets, it’s never too early to start estate planning. As medical professionals head through their careers and life events such as marriages, birth of children and the like, they should also regularly review documents with legal professionals to ensure that those documents meet their current circumstances.